Browsing by Author "Figueroa, Nicolas"

Now showing 1 - 7 of 7
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    Asymmetric partnerships
    (2012) Figueroa, Nicolas; Skreta, Vasiliki
    We study asymmetric partnerships and show that efficient dissolution is possible if critical types (where participation constraints bind) are equal. Ownership structures guaranteeing equal critical types always exist, but can be extremely unequal. (C) 2012 Elsevier B.V. All rights reserved.
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    Cash flows and credit cycles
    (2018) Figueroa, Nicolas; Leukhina, Oksana
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    Signaling through tests
    (2023) Figueroa, Nicolas; Guadalupi, Carla
    A firm (sender), privately informed about product quality, chooses a public test. Tests vary in informativeness and return a binary result. The market (receiver) forms interim beliefs based on test informativeness and posteriors based on test results. We show that standard single-crossing does not hold everywhere. A more informative test is less costly to the high type, who fails it less often, while better interim beliefs may benefit either the high or the low type depending on the prior. When a firm's expected quality is low, an increase in interim beliefs makes the market more sensitive to test results. Then the high type has more incentives to choose a more informative test and separation occurs. When a firm's expected quality is high, a further increase in interim beliefs makes the market less sensitive to test results. In this case, the unique equilibrium is pooling with both types choosing a test with intermediate level of informativeness.
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    Testing the sender: When signaling is not enough
    (2021) Figueroa, Nicolas; Guadalupi, Carla
    A worker, privately informed about his fit with a firm, chooses an action to signal this information. The firm might perform a test and decides whether to hire the worker. We define firm effectiveness as the difference between the optimal probabilities of hiring a good-fit and a bad-fit worker, and show that it has an inverted U-shape with respect to beliefs. When the worker's expected fit is low, firm effectiveness is increasing in beliefs, and information is revealed through both signaling and information acquisition. Since the high type is more likely to pass a more exacting test, he will exert costly effort to improve firm's beliefs. When, on the other hand, the worker's expected fit is high, firm effectiveness is decreasing in beliefs and any signaling effort made by the high type would be mimicked by the low type, who benefits more from relaxed standards, so that information is generated exclusively by the firm through tests. (c) 2021 Elsevier Inc. All rights reserved.
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    The Benefit of the Doubt: Patent Examination Under Strategic Obfuscation
    (2024) Figueroa, Nicolas; Lemus, Jorge
    An applicant privately observes the value of an idea and files a patent application. After the examination, the patent examiner may not find conclusive evidence of the idea's value. In this case, granting a patent can be the right decision or a mistake. Moreover, it can prompt obfuscation-effort to disrupt communication-by the applicant, reducing allocative efficiency. We show there is more obfuscation when examiners are more lenient, and we provide an empirical exercise supporting this conclusion. We also show that more examination resources do not prevent and may lead to more obfuscation. This result continues to hold when applicants can invest in knowledge to increase their chances of having good ideas. We also show that there is less obfuscation when good ideas are harder to find.
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    The impact of short-term pricing on flexible generation investments in electricity markets
    (2021) Villalobos, Cristian; Negrete-Pincetic, Matias; Figueroa, Nicolas; Lorca, Alvaro; Olivares, Daniel
    The massive growth in the integration of variable renewable energy sources is producing several challenges in the operation of power systems and its associated markets. In this context, flexibility has become a critical attribute to allow the system to react to changes in generation or demand levels. Thus, it is critical for market signals at both short and long term scales to include flexibility features, to align agents' incentives with systemic flexibility requirements. In this paper, different pricing schemes for short-term markets are studied, based on various relaxations of the unit commitment problem, including convex-hull approximations, with the aim of representing operational flexibility requirements in a more explicit way. Extensive simulations illustrate the performance of the proposed schemes, as compared to conventional ones, in terms of the capability of the system to properly incentivize flexibility attributes, resulting in better agents' cost recovery and more variable renewable energy utilization. The results show that short-term pricing schemes considered improve the long-term signals for flexible investments but additional changes to market design are still required. Thus, there is a need to revisit historical practices for pricing rules by incorporating additional flexibility-related attributes into them. Several alternatives are discussed and policy recommendations based on these considerations are provided.
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    The value of aggregators in local electricity markets: A game theory based comparative analysis
    (2021) Rodriguez, Rafael; Negrete-Pincetic, Matias; Figueroa, Nicolas; Lorca, Alvaro; Olivares, Daniel
    Demand aggregators are expected to have a key role in future electricity systems. More specifically, aggregators can facilitate the harnessing of consumers' flexibility. This paper focuses on understanding the value of the aggregator in terms of aggregation of both flexibility and information. We consider the aggregation of flexibility as the ability to exercise a direct control over loads, while the aggregation of information refers to knowledge of the flexibility characteristics of the consumers. Several game theory formulations are used to model the interaction between the energy provider, consumers and the aggregator, each with a different information structure. We develop a potential game to obtain the Nash equilibrium of the non-cooperative game with complete information and we analyze the system dynamics of consumers using the adaptive expectations method in an incomplete information scenario. Several key insights about the value of aggregators are found. In particular, the value of the aggregator is mainly related to the aggregation of information rather than flexibility, and flexibility is valuable only when it can be coordinated. In this sense, prices are not enough to guarantee an effective coordination. (C) 2021 Elsevier Ltd. All rights reserved.